|12 Months Ended|
Jun. 30, 2017
|Debt Disclosure [Abstract]|
|Components of Notes Payable and Capital Leases||
Notes and leases payable consisted of the following:
(1) The Company finances Directors’ and Officers’ (“D&O”) liability insurance as well as Errors and Omissions (“E&O”) liability insurance, for which the total balances are renewed on an annual basis and as such are recorded in current maturities. The interest rate on these financings range from 4.8% to 7.69% and from 4.25% to 5.89% as of June 30, 2017 and 2016, respectively.
(2) The Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £300,000, or approximately $389,610. The annual interest rate was 4.75% as of June 30, 2017. Total outstanding balance as of June 30, 2017 was £170,462 or approximately $221,379. Interest expense for year ended June 30, 2017 was $9,077.
This overdraft facility requires that the aggregate amount of invoiced trade debtors (net of provisions for bad and doubtful debts and excluding intra-group debtors) of NTE, not exceeding 90 days old, will not be less than an amount equal to 200% of the facility. As of June 30, 2017, NTE was in compliance with this covenant.
(3) In October 2011, the Company’s subsidiary, NTE, entered into a loan agreement with HSBC Bank to finance the acquisition of 51% of a controlling interest in Virtual Leasing Services Limited. HSBC Bank guaranteed the loan up to a limit of £1,000,000, or approximately $1,298,701 for a period of 5 years with monthly payments of £18,420, or approximately $23,922. The interest rate was 4% which is 3.5% above the bank sterling base rate. The loan is securitized against debenture comprising of fixed and floating charges over all the assets and undertakings of NTE including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future. Interest expense for the years ended June 30, 2017 and 2016 was $2,243 and $12,846, respectively. NTE paid this loan in full during the year ended June 30, 2017.
(4) The Company’s subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 500,000,000 or $4,776,461 and Rs. 400,000,000 or $3,792,907, respectively. The interest rate for the loans was 3% and 4.5% at June 30, 2017 and 2016, respectively. Interest expense for the year ended June 30, 2017 and 2016 was $121,306 and $148,475, respectively.
This facility requires NetSol PK to maintain a long term debt equity ratio of 60:40 and the current ratio of 1:1. As of June 30, 2017, NetSol PK was in compliance with this covenant.
(5) During the fiscal year, the Company’s subsidiary, NetSol PK, availed an export refinance facility with Samba Bank Limited, of Rs. 200,000,000 or $1,910,585, secured by NetSol PK’s assets. This is a revolving loan that matures every six months. The interest rate for the loans was 3% at June 30, 2017. Interest expense for the year ended June 30, 2017 was $2,511.
(6) During the fiscal year, the Company’s subsidiary, NetSol PK, availed a running finance facility of Rs. 300,000,000 or $2,865,877 from Samba Bank Limited. The interest rate for the loans was 8.13% at June 30, 2017. Interest expense for the year ended June 30, 2017 was $78,251.
The facilities from Samba Bank Limited require NetSol PK to maintain at minimum of current ratio of 1:1, Interest coverage ratio 4 times, Leverage 2 times and Debt Service Coverage Ratio 4 times during the tenure of loan. As of June 30, 2017, NetSol PK was in compliance with these covenants.
(7) The Company leases various fixed assets under capital lease arrangements expiring in various years through 2022. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The assets are depreciated over the lesser of their related lease terms or their estimated useful lives and are secured by the assets themselves. Depreciation of assets under capital leases is included in depreciation expense for the years ended June 30, 2017 and 2016.
|Schedule of Aggregate Minimum Future Lease Payments Under Capital Leases||
Following is the aggregate minimum future lease payments under capital leases for the year ended June 30, 2017:
Tabular disclosure of information pertaining to short-term and long-debt instruments or arrangements, including but not limited to identification of terms, features, collateral requirements and other information necessary to a fair presentation.
No definition available.
Tabular disclosure of future minimum lease payments as of the date of the latest balance sheet presented, in aggregate and for each of the five years succeeding fiscal years, with separate deductions from the total for the amount representing executor costs, including any profit thereon, included in the minimum lease payments and for the amount of the imputed interest necessary to reduce the net minimum lease payments to present value.
Reference 1: http://www.xbrl.org/2003/role/presentationRef